Today’s ruling by U.S. Bankruptcy Judge Steven Rhodes that Detroit is eligible for bankruptcy protection and can impose cuts to its municipal pension plans could reverberate in San Bernardino and other California cities.

“Pension rights are contract rights under the Michigan constitution,” the judge said, according to The Detroit News. “It has long been understood that bankruptcy law entails the impairment of contracts.”

The California Public Employees Retirement System similarly asserts that money owed it by municipalities is exempt from bankruptcy protection because the retirement system is protected by the California Constitution. San Bernardino and the city’s other creditors have claimed that CalPERS is just one of the city’s creditors, and does not stand above the others, because U.S. Bankruptcy Court is not bound by the state constitution.

Judge Rhodes’ ruling today strongly supports the city’s position.

It does not mean that Judge Meredith Jury will reach the same conclusion in the San Bernardino bankruptcy proceedings, but it seems likely. She has declared the city eligible for Chapter 9 protection in August and has turned aside CalPERS attempts to reverse her decision.

Judge Jury has not ruled, as Rhodes did today, on whether the city can impair its pensions.

There’s little question that Rhodes’ ruling will be appealed in Michigan. If it holds up, huge questions will remain: How much could or would the city cut pensions? And how would it go about it? Would it maintain low-paying pensions while trimming the costliest? Rhodes warned that he would not approve a plan that would cut pensions too steeply.

Howes concluded his column by saying, “If there was any doubt, Rhodes’ ruling today demonstrates that Detroit’s financial collapse is real, that it will affect real people living real lives, and that bankruptcy is the only viable path back to normalcy. Sad and sobering, yes, but inevitable.”